Bahrain intends to enter the global debt markets on Wednesday with a dual issuance, making it the latest nation in the Gulf region to take advantage of the strong demand for regional bonds.
Recently, both Saudi Arabia, Abu Dhabi, and Kuwait have successfully issued debt, leveraging favorable borrowing conditions and robust investor interest to expand their funding options. This has helped them address budget shortfalls, reduce existing debt, and further pursue economic diversification initiatives.
Bahrain plans to issue an Islamic bond, or sukuk, with a maturity of just over eight years, along with a 12-year conventional bond. Initial price indications have been set at approximately 6.25 percent and 7 percent, as reported by the fixed-income news service IFR.
In April, S&P Global downgraded Bahrain’s outlook from “stable” to “negative,” citing persistent market fluctuations, elevated debt levels, an increasing deficit, and declining financing conditions, which could heighten the government’s interest payment obligations.
As one of the smaller oil-producing countries in the Gulf, Bahrain is intensifying its efforts to shift its economy away from reliance on oil, focusing instead on growth in sectors such as tourism, financial services, and logistics.
This year, Bahrain successfully raised $2.5 billion through a combination of sukuk and conventional bond offerings.